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Take Maruti Suzuki: The now wholly-owned Japanese brand, it seems, changed gears just in time to survive and thrive despite the slowdown. Though not completely unaffected by the slowdown (the market leader posted a decrease in sales for all three months in the last quarter), in January 2009, Maruti Suzuki bucked the trend and reported a 5.59% increase in domestic sales. A closer look at their figures reveal that their recent additions to the A3 segment (D’zire and SX4) is what is making the numbers look so cool. The segment saw a two-fold growth, selling 6,590 units (even higher than their cash cow Maruti 800) as against 2,939 units in the same month last year.

But managing their brand portfolio well is not Maruti’s only claim to the marketing fame. Over the last quarter of stagnating sales, the motor company went on an overdrive to enhance its market penetration. For one, instead of restricting its annual dealer level discount scheme till the end of December (as it does every year to clear year-end sales), Maruti extended the lucrative cash discounts way into February; next up is their strategic tie-up with Corporation Bank to finance Maruti Suzuki vehicles on an all India basis to enable credit access at a time when banks are antsy about lending too easily; and finally, proactively embracing the ‘voluntary disclosure of fuel economy’ to drive home the message to consumers about their leadership in making highly fuel efficient cars. As per Shinzo Nakanishi, MD & CEO, Maruti Suzuki India Limited, the move “would enable customers to make an informed choice when purchasing a car in the market.” Look closely and you realise that all these measures were perhaps aimed at luring those 40 million PSU guys, presently flush with funds they made from the 6th Pay Commission killing. “The recent pay hikes and arrears given to more than 5 million government employees after implementation of 6th Pay Commission report can bring back the lost momentum in the industry,” says Shushmul Maheshwari, CEO, RNCOS.

What did the guys at Maruti do? They revitalised their brand despite and in spite of the slowdown by simply emphasising its core brand proposition – value for money, fuel efficient cars – and increasing its value!

What? You think that was a fluke? Okay, here’s another one!

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Have the cars, lost the road!

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The company had undertaken some prolific investments in the United States, but now it all appears to be overdone to an extent. While launching the expanded R&D facility in Michigan, Shigeki Terashi, President, Toyota Technical Centre said, “Toyota’s investment of $187 million to advance R&D demonstrates our commitment to the North American automotive industry.” Was this called for? An open question…

As a result of this argument, Toyota after a long hiatus is ready to offload close to 1,000-1,500 regular employees in this crisis. Toyota employs close to 30,000 workers in North America and UK and operates about 11 plants in these regions. The company also plans to trim its workforce further and wants to get rid of more employees through VRS. It is now clear that even for Toyota, the days of halcyon could well be over and a stricter market analysis is the call of the day.

Hit hard, Toyota is already beating around the bush or at least visibly so. Before the entry of the new president from the founder Toyoda family, the company has started working on the ‘Market Vision Plan’. Under this plan, Toyota will be working in a more docile way. For once, the company will be focusing more on product susceptibility to changing market conditions, planning for product launches up to the year 2015 and managing production cycles better. In all likelihood, Toyota must modulate its production in line to the changing demands of the market and must have the flexibility to divert unsold inventories towards more prolific markets.

The last six months have made it clear that even Toyota is not immune to making strategic bloopers. As a result of its aggressive expansion strategy, perhaps gloating from its success of becoming the world’s number one automotive manufacturer; an inevitability that was being talked about for years; Toyota is now making news for the wrong reasons. It has been rightly said, you cannot have too much of a good thing. Now what does Fujio Cho do with all those cars???

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM - Admission Procedure